Scalping and Intraday Trading Strategies Discussion - Page 6 - DailyFX Forex Forum

John Rivera · #76 (**permalink**) 10-29-2008, 09:03 AM

Quote:

Originally Posted by CHRIS VAUGHAN

Hi Again,
Please can someone explain the system Shaun Madden was talking about 14th/15th July 2007 on this thread. I am currently looking at candlestick charting packages. Am I looking at the wrong thing??? What is Shauns Slow Stoch Strategy

Chris

Here is a link with an explanation from our power course instructors.

Weekly Trading Lesson: Fast Stochastics or Slow Stochastics?

For more lessons and to have our instructors give you feedback on your efforts, I strongly recommend the course found here. Learn Forex Trading Online | Learn to Trade the Forex

John Rivera · #77 (**permalink**) 10-30-2008, 09:19 AM

Using a five minute chart and a RSI indicator for the GBP/USD would have given you several solid scalping opportunities during today's early trading as a touch or breach of oversold or overbought levels led to potential profitable trades.

Bertie Stemp · #78 (**permalink**) 10-30-2008, 07:34 PM

Hi John,

I was wondering about the term "scalping", and wanted to get your opinion on something.

People have different opinions on what a scalp actually is, some say its any trade where you look to make 10 pips or less in a trade, others like to define it by the time scale?

It would be good to get yours and anyone elses opinion on this matter, as i am sure there is no right or wrong answer. Would using a 15min chart constitue scalping?

Thanks

Bertie

Thomas Long · #79 (**permalink**) 10-30-2008, 11:23 PM

Quote:

Originally Posted by Bertie Stemp

Hi John,

I was wondering about the term "scalping", and wanted to get your opinion on something.

People have different opinions on what a scalp actually is, some say its any trade where you look to make 10 pips or less in a trade, others like to define it by the time scale?

It would be good to get yours and anyone elses opinion on this matter, as i am sure there is no right or wrong answer. Would using a 15min chart constitue scalping?

Thanks

Bertie

I happened across your question and didn’t think that you or John would mind if I threw my two cents in here. I think that the term “scalping” has taken on new meanings in the last few years. Scalping was the term used to describe the style of trading used by floor traders on the various exchanges throughout the US. Since they were “making the market” in their pit or at their post, they earned the spread on each trade instead of paying the spread like we do when trading FX. This means that the amount of money they made each day was based on the number of trades they could make.

In my opinion, because there are less floor traders now because of the popularity of the electronic markets, scalping now is used to describe the style of trading where the trader enters and exits in a short period of time. Whether that time is based on the time frame chart used or the number of pips set as a profit target, it is all now referred to as scalping. While day traders will often stay in for the entire day, scalpers will trade multiple times a day.

I actually think that scalpers would prefer to use the 5-minute chart instead of a longer-term chart so they can see more potential trades. Certainly that makes it appealing for FX traders since they have access to the markets 24 hours a day. So even if you can only follow the market for a short period of time each day, the possibility of finding at least one trade a day seems likely when using a 5-minute chart in your scalping approach.

John Rivera · #80 (**permalink**) 11-04-2008, 10:19 AM

A oversold RSI Indicator would have signaled a long GBP/USD trade that would have netted over 400 pips in profit. Although a couple of false overbought signals may have led to you closing the trade the initial move was still worth over 100 pips.

Bertie Stemp · #81 (**permalink**) 11-05-2008, 05:13 PM

Thanks for your response, your two cents is most appreciated.

I guess that im a scalper then under your guidlines, when i trade i will make anywhere up to 8 trades a day, maybe more, but usually look for over 20 pips, but every trade has different merits.

Your initial explanation is very interesting with regards to the floor traders! I will have a look around to see if i can find some more depth on that! That is what traders do though right, they still scalp.

Anyone else have 2 cents they can throw in

Much appreciated

Bertie

fx128 · #82 (**permalink**) 11-05-2008, 11:23 PM

news trading is great if you have your limit in place made 100 pips on news then 2 minutes later lost it all must use limit orders not to mention stop loss orders take out the human element

Thomas Long · #83 (**permalink**) 11-06-2008, 10:44 AM

Quote:

Originally Posted by Waldo

Hi

Ive been trading in FXCM Micro since September 30 and after the initial stumbles and mistakes in the first 3 weeks have settled in and have been trading on the same 100 dollars for about 2 weeks now and put on over 600 trades without any significant gains or losses.

Which I see as a good thing.

I see many other people are trading looking for small moves and I have to say that the trailing stop settings are not helping

They need to have a setting thats a percentage or a ratio to the price movement as this would quickly move you to breakeven and then incrementely ahead as the price moves forward while still keeping you back from the trading range so that you could catch even longer moves.

I cannot count the number of times I had a drawdown on trades that moved ahead 20 30 40 68 pips (yesterday) because I had the stop set at 30 40 50 75.

Its hard to monitor each position constantly and even if you did a trade can make these moves both ways in the blink of an eye and you would not even have time to adjust your stops before it comes back and stops you out (Ive seen many 30 pip moves that turned into instataneous stop outs)

See what Im saying?

They really need to do something about this and its getting tiresome writing on these message boards and emailing FXCM without getting any results (results...results...results.....) --------man this echo in here gets annoying dontcha think?

Waldo

GLT!!

Unfortunately, I do not quite understand what you are trying to do. The Trailing Stop feature on the FX Trading Station is designed to follow your trade up until the time the market reverses and stops you out or reaches your profit target. While using this feature does limit your gains, it can also limit your losses. Here is more:

Thomas Long · #84 (**permalink**) 11-06-2008, 11:28 AM

Quote:

Originally Posted by Waldo

Hi Tom

The trailing stop feature is not working the way you are describing here

What happens is, say you set a 30 trailer, the trailer does not move at all until the position moves 31 pips, then the trailer quickly pushes you forward 30 and into the trading range and you are usually stopped there.

If your position moves forward 29 you get nothing and the position can then turn around and stop you out at whatever your backstop is set at also you cannot set the stop to a fraction as the minimum is 10.

What happens is if you set a 10 stop thats all you will get and if you set a 100 stop you will get nothing if it doesnt reach 100 and probably only 100 if it does

I hope I am not missing something but I believe this is how its working and Im sure you can see the flaw in this setup

Let me get in the demo account and try and get a bunch of trades on and see how they pan out and see if Im making an obvious mistake (Im pretty sure not though)

GLT!

Waldo

It does on some accounts and will on all accounts in the next couple of weeks. However, even if the minimum move on the trailing stop feature is 10 pips, the number of pips you place your stop from your entry and the number of pips used in the trailing stop feature does not have to be the same. You can set your initial stop 100 pips from your entry and trail your stop with every 10 pip move. This way the stop moves up 10 pips with every 10 pip move of the market until the market reverses and stops you out or your target is hit. Soon you will be able to set the minimum to .1 pip, but it will work the same as it does now.

Thomas Long · #85 (**permalink**) 11-06-2008, 11:54 AM

Quote:

Originally Posted by Waldo

Tom

See what happens is this

If you set a 10 stop which is the smallest increment, when the position moves to 11 the stop will move you to breakeven, then if the position moves to 20 it will move you to 10 and so on...

The problem is if you set a 20 50 100 1000 trailer you need to get 21 51 101 1001 before you get any movement, which is no good because uhhm Id like to have a few of those pips in between locked in if you see what Im saying

@19 49 99 and 999 you have done nothing yet and the whole kaboodle can turn right back and stop you out at whatever your stop loss is set at

Very very frustrating this can be!

I hope they can do something with this soon because I cannot truly see where I would be at because Im missing so many breakevens, incremental gains and even long gains because the position will not move unless Im actively managing it which can be tough as a trade set at a resistance or support level might take hours before it hits your bid.

If they had the fractional setting it might help or a ratio or percentage.

TIA

GLT!

Waldo

I don't think you will ever see a ratio or percentage as part of a trailing stop feature. But if you sell on a move down through support at 1.2500 and are looking for a 40 pip gain while risking 20 pips, you can use the current feature quite effectively. With your stop set at 1.2520, you can use a 20 pip trailing stop and as the market moves halfway to your target, your stop will move to breakeven. So your stop moves from 1.2520 down to 1.2500 as the market moves from your entry of 1.2500 to 1.2480. Then you can break even if the market reverses or if the market continues to your target of 1.2460, you will realize 40 pips in profit.

Thomas Long · #86 (**permalink**) 11-06-2008, 11:54 AM

Quote:

Originally Posted by Waldo

Tom

ahhhhh ok thats great news, I think the fractional setting will do the trick!

Thanks for the quick reponses Tom I appreciate it!

Waldo

GLT!

You're welcome....and good luck with your trading!

neuronaut · #87 (**permalink**) 11-06-2008, 07:17 PM

Quote:

Originally Posted by Thomas Long

... Soon you will be able to set the minimum to .1 pip, but it will work the same as it does now.

I was able to set my minimum to .1 pip on a demo account I had back in August or so, but it changed back up to the minimum of 10 sometime around mid-September or so. I really liked the .1 when I had it -- any info on when this feature might be coming back?

Thanks,
Thomas

John Rivera · #88 (**permalink**) 11-10-2008, 10:22 AM

Quote:

Originally Posted by Waldo

Hi

My take on scalp trading is this

I see that by carefully managing your drawdown and risk (focusing on not losing rather than winning) that you can trade very actively and pretty much maintain breakeven or better by taking some short gains when you fall slightly behind, (the new trailing stop setup should help immensely here) then the next step would be to start thinking of a scalp thats ahead as a day trade, if still good later, a position trade and if still good later than that, a long term trade.

Well thats the plan anyway

Id also recommend anyone starting out to simply trade a single contract and then if over a substantial period of time and trades you are making incremental gains and not losing money to then increase your position size, because once you can do that with a single contract you should be able to do the same with a larger position due to the fact that everythings pretty much scalable on the Forex and with a single contract you are not liable to bust out your piggy bank in the process of learning (Oink! Good!)

Wado

GLT!

Good Advice,

I would also recommend taking two positions where one is set at your target and once it is hit you take profit on one position and then move your stop on the other position to the target. Thus, allowing you to take advantage of any additional profits while you have already tucked away some. If you have reasonable stops over time your accuracy wouldn't have to be more than 50% to make a profit.

John Rivera · #89 (**permalink**) 11-14-2008, 10:48 AM

Well now I know the answer to where's Waldo, he is in the scalping forum talking to himself. Anyway thanks for the input hopefully we will get a few more contributions. Sorry I was ill for a few days so I left you holding down the fort. While I was away looks like the price action in the EUR/USD the past few days was providing some great scalping opportunities didn't look to take advantage of any them?

therumpledone · #90 (**permalink**) 11-15-2008, 10:01 AM

ALL YOU NEED TO TRADE IS A HORIZONTAL LINE

TRADING IS SIMPLE.

There is an entire industry built around making you think it is complicated.

All you need is a HORIZONTAL LINE on your chart to be a profitable trader.

I bet you doubt me, don't you?

Go long when the price moves UP to a price ends in 00, 25, 50 or 75.

Go short when the price moves DOWN to a price ends in 00, 25, 50 or 75.

IT IS THAT SIMPLE!!

Look at the chart and see how many pips you can make when you trade with the H1 candle color.

You can do this with stocks, currencies, futures, etc.

Oh when to take profits? Where to place stops? Just DON'T BE GREEDY and use COMMON SENSE! Learn some money management.

Pick ANY candle on the chart.

1) identify the color.

2) let the candle close

3) if the next candle is NOT the same color then:

if the current candle is GREEN go LONG at the FIRST line it approaches

if the current candle is RED go SHORT at the FIRST line it approaches

When to exit? Usually, when price stalls.

Stop loss? If price crosses the previous candle's midpoint.

Does that help?

So simple.

If H1 candle closes green then on next red candle go SHORT at the line.

If H1 candle closes red then on next green candle go LONG at the line.

Be patient. Don't rush the trade.

Don't be greedy and you can rack up the pips.

Let me answer the WHIPSAW protester before they even get started.

Of course, there will be price action around the x.00 and x.50 levels. That's what we are looking for and that's the reason we trade with the color of the H1 candle rather than the M1 candle ( M1 chart above ).

Just use a little risk management and money management.

Practice with 1 minilot or 0.1 minilot until you get the hang of it.

One of the things you want in trading is an "edge".

You are NOT going to win every trade.

So you want something that gives you a edge.

Casinos have edge in the range of 0.55 - 2%. That's all they need.

My statistics show this edge is much higher.

Choppy days? I love choppy days. So long as the average hourly range is over 25, that's all the edge I need. THINK ABOUT IT!!

You can look for situations where this doesn't work...

-OR-

You can wait for the setup and walk away with a handful of pips.

IT'S ALL UP TO YOU!

The best trade is waiting for the reversal.

When to get out? If you have profit, get out when you want to. You can always exit part of your position. Move stop up to breakeven and let the rest ride!

Once again, the color of the previous candle makes no difference. YOU TRADE WITH THE CURRENT CANDLE COLOR. It is that simple. Don't make this simple trading method complicated.

Once again, waiting for a reversal is the "safe" trade.

You must trade in the moment. The past is over!

All that matters is what price is doing now!!

What would you do if all you had on your chart was the current candle?

If the current candle is green would you short?

If the current candle is red would you buy?

Does this make it clearer?

This is a safe trade for the new trader.

But, whether or not you use the previous candle to decide if you are going to trade the current candle, YOU MUST FOCUS ON THE CURRENT CANDLE TO DECIDE WHICH WAY TO TRADE.